THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

SUZANNE MALVEAUX, GUEST HOST: Thanks, Brooke.

Happening now, high drama on Capitol Hill -- a tax cut vote is put hold in the House and the Senate squabbles over a spending bill packed with lawmakers' pet projects. One Republican insists that the 2,000 page bill be read aloud word for word a task due to begin an hour from now.

Rising tensions have the two Koreas on a hair trigger, as Wolf Blitzer begins an extraordinary visit to the communist North. It's a television exclusive.

And after the killings of two congregants, a crime fighting priest steps out of the pulpit and into the streets -- what he is doing to help clean up his city. While Wolf, is on assignment, I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Well, there's a deep freeze outside, while inside the Capitol, the following critical issues are frozen. A compromise tax bill is stalled in the House. Stuck in the Senate, a government spending bill, the nuclear arms treaty with Russia and a measure repealing the Pentagon's "don't ask/don't tell" policy. Majority Leader Harry Reid warns the Senate could stay in session right through Christmas and New Year's.

Our CNN Congressional correspondent, Brianna Keilar, is keeping track of all these developments what do we understand, Brianna, is going on at the Hill right now?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Oh, there is so much going on.

Here in about an hour Suzanne, the Senate is due to switch from talking about this nuclear arms reduction treaty. And they're going to be talking about this bill that is next to me. You can tell it's just gigantic. This is a huge spending bill that would fund the federal government, which is due to run out of fund here in a couple of days and after losing some Republican support, you know, you can just take a look at this I mean this gigantic, huge, huge bill right here. After losing some Republican support on this bill, Senate Majority Leader Harry Reid made a threat that he would keep the Senate in session over the holidays, through January 5th, to get everything done that they need to get done. And he really called them to the mat for objecting to earmarks that are in this bill.

Here's what he said.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: You can't have it both ways. You can all look it up in the dictionary yourself, but I'll bet if you went to H in the dictionary and found hypocrite, under that would be people who ask for earmarks who vote against them.

(END VIDEO CLIP)

KEILAR: Now, a lot of the earmarks that were in this bill are in this bill, were put in months ago by Republicans who have since taken an anti earmark stance. That's part of his objection there. Now today, Harry Reid really defended those earmarks and he said he would defend it against whoever is in the White House, be it George Bush or Barack Obama.

But again, looking at this bill, this is 2,000 pages. And, Suzanne, this is really going to be quite dramatic here in about an hour, because Senator Jim DeMint, a Republican, is insisting that this whole bill be read. And we are told by the number two Democrat in the Senate, Dick Durbin, that that could take somewhere between 30 and 60 hours for the Senate clerk to read.

MALVEAUX: Wow! So that is an unbelievable development that we're watching there.

Meanwhile, you've got House Democrats. They're now stuck on the tax bill.

Tell us what's going on with that.

KEILAR: That's right. Liberal Democrats, who have had some objections to this agreement that was reached between President Obama and Senate Republicans, they're in a full scale revolt at this point.

Earlier, we saw Democratic leaders have to pull this bill from the floor because it we go to be clear or it seemed clear that it might not clear, really, a procedural hurdle.

At the same time, Speaker Pelosi is insisting that they're going to go ahead with a vote tonight. But liberal Democrats are saying, you know what, we want some votes on changes. We want to have some changes. And Democratic leaders had said we're only going to let you do one change. That's going to be a vote to change the estate tax, to make it less generous to the wealthy.

Well, liberal Democrats, seeing that they probably weren't going to be able to get that change, that that vote wouldn't pass, they're not really worried necessarily so much, at this point, about getting those changes. They know it might not be a reality.

What they're really trying to do here is send a message that they dislike this bill. And they want to sort of hit it as many times as they can -- Suzanne.

MALVEAUX: Sure.

Well, Brianna, we know that you'll be giving us updates as it changes from hour to hour. I'm sure, way into the evening and throughout the weekend. Brianna, thank you so much for keeping us posted.

I want to also mention, while many on both sides of the aisle find the tax cut compromise a bitter pill to swallow, the deal is creating such a special dilemma for Republicans who are weighing presidential runs in 2012. And one of them says it's a tough call.

Our CNN national political correspondent, Jessica Yellin, she's been looking into that -- Jessica, I want to start off with who's opposing this and why.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Who is opposing it, Suzanne, makes it clear that there is no unity among Republicans on this measure. Those opposed include Sarah Palin, Congressman Mike Pence, former Governor Mitt Romney and former senator, Rick Santorum.

Now, some of the reasons they cited include they'd like the tax cuts extended longer than two years. Some object to the change in the estate tax and to the additional spending without cuts to offset that.

In general, they say that the overall package won't create jobs, in their view. And they believe that the next, more conservative Congress, Suzanne, in their view, could deliver a bill that they like better.

MALVEAUX: So who's actually supporting it on that side?

YELLIN: OK, well, on the other side, there is Indiana Governor Mitch Daniels, former House Speaker Newt Gingrich, Minnesota Governor Tim Pawlenty and South Dakota Senator John Thune.

What do they say?

Well, they say there's plenty in the tax package that they don't like, but they think this deal is better than the alternative, which is letting taxes go up on January 1st. They also say it provides some clarity about the future, which business leaders have wanted.

Now, clearly, there is potential political danger in both positions. For those who vote yes, they risk incurring the wrath of Tea Party groups, some of which have said they don't like the bill. For those who vote no and if the bill fails and taxes go up on January 1st, well, of course, Suzanne, they risk incurring the wrath of voters who don't want higher taxes.

MALVEAUX: And we have yet to find out what's going to happen January 1st. YELLIN: Right.

MALVEAUX: We really don't know.

YELLIN: We'll wait and see what happens with the tax package first. Yes.

MALVEAUX: Right.

OK, thanks very much, Jessica.

Well, nine years into the war in Afghanistan, President Obama insists the U.S. is making some progress toward defeating Al Qaeda. He says he'll travel to Pakistan next year, in part, to push for tougher action against what he called "terrorist safe havens" there. Now, the president spoke as the White House released a new review of U.S. war strategy.

I want to turn to CNN foreign affairs correspondent, Jill Dougherty -- and, Jill, we understand this is a pretty high profile event. But, obviously, the president trying to reassure the American people that the country is on the right track.

What did we find out today?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, you know, Suzanne, there really wasn't any breaking news from this review. In fact, Robert Gibbs was downplaying it all week. It wasn't so much what the president said as how he said it.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): The president and his A team on Afghanistan trooped into the White House Briefing Room, crowding onto the podium to face a phalanx of reporters.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This continues to be a very difficult endeavor.

DOUGHERTY: No triumphant declaration of victory. Instead, a nuts and bolts report card on how the U.S. is meeting its goal.

OBAMA: It's not to defeat every last threat to the security of Afghanistan. It's not nation building. Rather, we are focused on disrupting, dismantling and defeating Al Qaeda in Afghanistan and Pakistan and preventing its capacity to threaten America and our allies in the future.

DOUGHERTY: One phrase kept popping up.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Fragile and reversible.

ROBERT GATES, SECRETARY OF DEFENSE: Fragile and reversible.

UNIDENTIFIED MALE: This is the peace that we talked about that was fragile. DOUGHERTY: The only pat on their own back came from Hillary Clinton, who said the president inherited an extraordinarily difficult situation from the Bush administration.

HILLARY RODHAM CLINTON, SECRETARY OF STATE: There was no coherent strategy to unify America's efforts in the region. There was no clearly defined mission. And our people, both our military and our civilian forces, lacked the resources they needed to get any progress accomplished. Today, we have a very different story to tell.

DOUGHERTY: It is a different story, but President Obama knows the last chapter is still being written.

OBAMA: None of these challenges that I've outlined will be easy. There are more difficult days ahead.

(END VIDEO TAPE)

DOUGHERTY: So the president and his team say that the U.S., so far, is on track to begin reducing the number of U.S. troops in Afghanistan next July and to make that full transition to Afghan troops taking the lead for security by 2014.

But read the fine print. After the president left, Defense Secretary Gates made it very clear that this is -- the transition will be gradual and it will be based on conditions on the ground -- Suzanne.

And WikiLeaks founder, Julian Assange, is out of jail and speaking out about the sex charges he faces and his disclosure of classified U.S. documents.

Plus, word that Al Qaeda may be planning suicide attacks during the holiday period in the U.S. and Europe.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: A scenic icon is hanging up his suspenders tonight. I bet you know who we're talking about.

Jack Cafferty is here with the Cafferty file -- hey, Jack.

JACK CAFFERTY, THE CAFFERTY FILE: Tonight marks the end of an era, Suzanne, not just here at CNN, but all across, I suppose, the landscape that has become cable television.

Larry King is going to do his final nightly broadcast for this network at 9:00 Eastern time tonight. And when he walks out of the building, well, there's going to be a space left behind that will never be filled quite the same way again.

In fact, it's fair to say if it wasn't for Larry King, it's entirely possible I wouldn't be sitting here talking to you right now and a lot of other people in this business wouldn't be, either.

When CNN was in its infancy and the rest of television was laughing at Ted Turner's idea of a 24-hour news network, Larry King came along, put this network on his back and carried it until its credentials as a viable news organization were accepted by the viewing public. And he has had the highest rated show in this place for year after year after year. Along the way, Larry became the gold standard for talk television. So many of his interviews managed to make news elsewhere.

There wasn't anyone in the last 25 years he didn't talk to.

There's Larry in the early days and there is he is today. This included all the presidents from Richard Nixon forward -- Gerald Ford, Jimmy Carter, Ronald Reagan, Bill Clinton, both Presidents Bush and Barack Obama.

Entertainers, pick one -- Marlon Brando, who kissed him on the lips one night; Johnny Cash, Paul McCartney, Barbra Streisand -- anybody in the world of show business.

He was also very kind to a first time author when something called "It's Getting Ugly Out There" was published.

I've actually known Larry King since my days at WNBC television here in New York City, when he would occasionally be a guest on my program there "Live At Five." He's a class act. He's my friend. And I, along with millions of television viewers, are going to miss him.

So here's the question -- what will you remember most about Larry King?

Go to CNN.com/caffertyfile and reminisce with me -- Suzanne.

MALVEAUX: Jack, you look pretty good in that shot there.

CAFFERTY: I was about six months younger.

MALVEAUX: Yes. Just six months.

CAFFERTY: I had a couple of more hairs.

MALVEAUX: All right, Jack.

We look forward to all your comments.

Well, don't miss Larry's final show. That is tonight. That is live at 9:00 p.m. Eastern. Well, it is being called a, quote, "tremendous setback" for the country's missile defense system. Ahead, we'll show what you went wrong with a critical test.

Plus, the controversial WikiLeaks founder speaks out following a dramatic development in his case. We'll hear how he is addressing allegations of sex crimes against him.

(COMMERCIAL BREAK)

MALVEAUX: The Pentagon is now 0 for 2 this year in tests of this country's only long-range missile defense system, which cost taxpayers $100 billion. An interceptor again failed to hit its target, launched from across the Pacific, prompting one advocate of the program to call it "a tremendous setback."

CNN's Tom Foreman is at the Data Wall -- Tom, tell us what went wrong here.

TOM FOREMAN, CNN CORRESPONDENT: You know, simple enough, Suzanne. You said it right there, they missed.

Let's look at what happened here.

This is the Marshall Islands. This is where the target took off. This is video of that happening. You see it launch and go sailing up, up, up into space here. This is what they're aiming at when they launch the response.

Now, as that flies on up into space here, it's being tracked by radar systems here on ground and out in the water. Those worked. This part we know worked. They spotted this thing flying up here. But then the problem came over here. They launched the interceptor, which is supposed to fly up and hit that target. And it just didn't.

Now the question you might ask is, why would this be so hard?

This seems like a fairly reasonable piece of technology. We have other things, I guess, that you could say are kind of like it. But it's not really true.

I want to talk a little bit about the technology involved here.

This is what's happening. If we had an actual attack, what you would have is an ICBM being launched from somewhere and going hundreds of miles into space. Once it gets a few hundred miles into space, it's going to release its warhead. And this is important because once the warhead is released and is flying up here, it may have with it several decoys, as well. All of these are released flying through space and going at about 15,000 miles an hour. And the warhead itself is only about the size of a refrigerator -- not very big. All by itself, 15,000 miles. All of these around it.

So then, when the interceptor down here is also being launched, this part of the interceptor, which is important to remember, the part that's actually going to break up the target, this is only about the size of a television set.

So you have these two things having to collide out here in the middle of space. So if the interceptor has taken off over here and it's going up at 15,000 miles an hour, they're hoping to meet here in the middle and make a giant explosion happen.

I want to show what you that actually looks like. This is an infrared image of one of these tests working. All you see is the target comes in from the side. And, boom, it gets hit up there.

There's actually not an explosion in the sense that there's no arm on top of this -- the projectile that's going in here. It's physically hitting this refrigerator-sized target and breaking it apart. That's what breaks up the warhead. And it does no good to hit anything else. You've got to hit the warhead.

So the simple truth is what they're trying to do, Suzanne, is very, very difficult. Hundreds of miles in space at this unbelievable speed -- more than 20 times the speed of sound, trying to make these two items collide. This has been worked on for 30 years now, in many different ways much. The technology keeps advancing. Every time they do a test, they have to update their information. But then new technology comes along, so in the next test, you have new technology, which also hasn't been tested.

Maybe someday it will all come together. But as of so far, as we saw yesterday's test, it still remains an enormous challenge to try to make a system like this work.

We got a lot of help on this from Global Sakority -- GlobalSecurity.org, Suzanne, who knows an awful lot about this.

MALVEAUX: And, Tom, it -- it makes a lot of sense, when you put it in that perspective, when you really take a -- a look at that and just how small those objects are, when you talk about the size of a refrigerator and a television and having those two meet at such a high altitude, it really...

FOREMAN: The whole thing is happening, Suzanne...

MALVEAUX: -- quite extraordinary.

FOREMAN: -- in a space no bigger than this screen. Everything is happening in a space no bigger than this screen at this unbelievable speed.

MALVEAUX: OK.

Thank you, Tom.

Well, Don Lemon is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now, including a dramatic development for the controversial WikiLeaks founder -- hey, Don, good to see you. What are you learning?

DON LEMON, CNN CORRESPONDENT: Good to see you, Suzanne. Let me tell you about Julian Assange. He is now free on bail, nine days after being arrested for questioning about alleged sex crimes in Sweden. He spoke out about the allegations shortly after exiting a London courthouse.

Take a listen.

(BEGIN VIDEO CLIP)

JULIAN ASSANGE, WIKILEAKS FOUNDER: I hope to continue my work and continue to protest my innocence in this matter and to reveal, as we get it, which we have not yet, the evidence from these allegations.

(END VIDEO CLIP)

LEMON: And, Suzanne, there are some stipulations here. Assange will be required to stay at the home of a supporter, report to police daily and wear an electronic monitor. He is expected back in court, though, next month.

The Food and Drug Administration is recommending that the drug Avastin no longer be used to treat metastatic breast cancer, citing studies showing the benefits could outweigh dangerous side effects. The agency says that patients currently taking the drug as part of a chemotherapy regimen won't be affected. Avastin is approved to treat other cancers, as well.

The Commerce Department is proposing a new framework for protecting consumer privacy online. The government agency says the so-called Privacy Bill of Rights could encourage better transparency about data collection and promote, you know, "informed consent" for consumers. The plan would be voluntary and would likely require Congressional approval to be enacted.

Those are the headlines right now -- Suzanne, you're talking about your favorite Larry King moment. There are so many of them.

I think I look at Larry King as the master, kind of like -- kind of like Johnny Carson. Remember, you stay up and watch Johnny Carson. There are very few masters and Larry King is absolutely one of them.

MALVEAUX: Absolutely.

Well, we'll all be celebrating and wishing him the very best tonight.

Thanks, Don.

Outrage on Capitol Hill over billions of dollars in pet projects packed into a spending bill to fund the government.

Will President Obama pay a price if the measure is passed?

Plus, the president says the U.S. is on track in Afghanistan. But there are new indications most Americans may not agree.

And it's crime fighting with a religious twist. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Here in Youngstown, Ohio, Father Greg Maturi says his main job right now is keeping his parishioners from being murdered and that's why he's stepping out of the pulpit and into the streets.

Coming up only on THE SITUATION ROOM.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MALVEAUX: Growing outrage on Capitol Hill over a spending bill to fund the government that's packed with billions -- billions of dollars of lawmakers' pet projects.

Joining us to talk about that and more in today's Strategy Session, CNN political contributors Roland Martin and Republican consultant, Alex Castellanos.

Thanks for joining us in THE SITUATION ROOM.

ALEX CASTELLANOS, CNN POLITICAL ANALYST: Not a problem.

MALVEAUX: We want to start off by talking about this spending bill to keep the government running. We're talking about $1 trillion. It's got about 6,000 earmarks in it, which is a total of about $8 billion or so. Covering the campaign, the Obama campaign, he was dead set against earmarks.

Here is what he said shortly after becoming president, to Congress, in February, 2009.

Take a listen.

(BEGIN VIDEO CLIP FROM FEBRUARY, 2009)

OBAMA: I'm proud that we with passed a recovery plan free of earmarks. And I want to pass a budget next year that ensures that each dollar we spent reflects only our most important national priorities. And yesterday, I -- I held a fiscal summit, where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs.

ROLAND MARTIN, CNN POLITICAL ANALYST: First of all, the budget is being sent to him by Congress. And so the real onus of this one is not on the president...

MALVEAUX: His own party.

MARTIN: It is -- yes, it's -- no, it's both parties. I mean look...

MALVEAUX: Both parties...

MARTIN: But look, my...

MALVEAUX: -- but majority Democrats.

MARTIN: Right. I've got my boots on right now and my man from Texas, Senator John Cornyn, he stands there to say I'm going to vote against this bill even though it contains earmarks that will help my state.

Because you know what?

He knows it's likely to pass and he's still going to get his earmarks.

This is when both parties, Democrat and Republican, play footsie with the issues and they both lie consistently and they both love earmarks. Both of them are fraudulent on this issue.

But this is -- a little political advice for the president here. This is one of the few opportunities he's going to have to turn his fortunes around. Remember how Rudy Giuliani turned around New York City? It was the small things, the street lights, because that let people know, hey, if you can work together to do these things, we can tackle the big, insurmountable problems, too.

If the president picked up the phone right now, Harry Reid, get these earmarks out of this budget, he would pick up 20 points in the polls. People believe him, that he had some credibility on spending. He could begin to turn his poll numbers around...

(CROSSTALK)

MARTIN: No, he wasn't.

(CROSSTALK)

CASTELLANOS: This is one of the few opportunities he'll have.

MARTIN: He wouldn't, because the same -- look, some of the biggest supporters of earmarks are folks out of Mississippi -- Thad Cochran, Jim Inhofe -- I mean you have a...

CASTELLANOS: I'm trying to help your guy...

MARTIN: No, no, no. No. No (INAUDIBLE)...

CASTELLANOS: -- Roland. MARTIN: And this is not going to do anything to help him with any poll numbers.

The reality is, you have people who complain about earmarks, even the general public, they say we hate earmarks, but they don't mind it when they come to their Congressional districts. I've never seen a constituent say, oh, send it back, please. They all lie when it comes to earmarks.

CASTELLANOS: This is the street lights of New York City. The president could begin to turn the ungovernable city around if he just picks up the phone and calls (INAUDIBLE).

MARTIN: And then, if they don't pass this and all of a sudden you begin to see of -- offices shut down, people going to national parks, they're going to say, the president, he didn't sign the bill. Blame it on him.

MALVEAUX: Well -- go ahead.

MARTIN: And that's what it is.

MALVEAUX: Well, I'll tell you something that people are angry with. They're disgusted about the war in Afghanistan. In a latest poll, I wanted to show you, ABC News/"Washington Post" poll says that 60 percent of Americans say the war in Afghanistan is not worth fighting. Thirty-four percent say it has been worth fighting.

We see this report that comes out today from the administration, not surprising, saying, look, there is some progress, but it's fragile, it's reversible.

Is this something ultimately that is going to cost President Obama as the year goes on and this war drags out?

MARTIN: Well, here's what's interesting. If you actually take off "worth it" and "not worth it" and substitute Republican for Democrats, you're likely to see 60 percent of Republicans for it, 34 percent of Democrats against it. I mean, it's amazing how the president, on this issue, gets more support for Afghanistan from the right than he does from the left.

MALVEAUX: So that makes it a bigger problem for him.

MARTIN: Well, absolutely, because it's not like the right is going to actually vote for him anyway. But also, the one thing any Democrat fears, being called soft on defense and soft on terrorism.

CASTELLANOS: The president is going to have to move to the right on so many things to try to get re-elected, and he's already done it on taxes, tax cuts for the rich. He's going to have to move to the right on spending cuts and cut some things the Democrats are not going to want.

He has got very few places to make his base happy. I think by this summer, he is going to start pulling people out of Afghanistan. He has to.

This is the one thing that could get a Howard Dean back into the presidential race against Barack Obama.

MARTIN: It's not going to happen. He's not going to run.

But again, though, when it comes to Afghanistan, you already have this whole notion of the drawdown in 2011 anyway, that was all -- that announcement last year tied was to that very issue. He knows full well he cannot go into 2012 with having the same troop level that's there today. He knows it.

MALVEAUX: We already know that the timeline has been extended to 2014. I mean, he's already giving it all some more time.

CASTELLANOS: He's going to declare victory sooner than people think and start bringing people home.

MARTIN: Well, you will not see him make a mistake like President George W. Bush, do "Mission Accomplished," so you will not hear him declare victory. You will see him talk about progress being made, even though it's very slow.

MALVEAUX: I don't know if people will believe that progress is being made. You talk about there are about 100 people who were arrested outside the White House today, anti-war protesters. Do you think they are going to tolerate that for much longer? I mean, the idea, the notion that progress has been made? We keep hearing that from the administration.

MARTIN: When you make the point that, first of all, where were we in terms of the bases, in terms of the people who were trained, who struck America on 9/11, came from Afghanistan. Like it or not, we have to confront the unstable situation in that region.

We have to deal with that. It is painful to Americans to deal with it, but the last thing anybody wants to in this country is another terrorist attack. And so you have to deal with the Taliban, deal with al Qaeda, right there Afghanistan and Pakistan.

CASTELLANOS: Instability is not always a detriment. Sometimes instability can be an asset if it's instability that's in the heart of the enemy camp. And having a little bit of instability next to Pakistan is not the worst thing. And our focus ought to be on Pakistan, not on Afghanistan.

Look, we all know why the Democrats are in this war, because George Bush was fighting in Iraq. They said that was the bad war. Afghanistan must have been the good war. Well, it turned out it wasn't the good war, it's complicated.

He's trying to extract himself from a political problem. He's going to start pulling out by next summer.

MARTIN: Actually, correct yourself. No one said it was a good war. What people said was, where it should have originated was Afghanistan, and it was wrong to go after Iraq when they had nothing to do with 9/11. So, using good and bad war is not appropriate.

CASTELLANOS: This is what happens when you play politics.

MARTIN: No, it's not politics. No war is good, Iraq or Afghanistan. And it's wrong for you to make that kind of statement. The issue was Afghanistan was where the attacks took place, not Iraq.

MALVEAUX: What does the president need to tell the American people in the State of the Union? That this is -- ultimately, this is going to end in a timely way?

CASTELLANOS: About Afghanistan, he is going to need to say, and I think he will say, we have done everything we can do, but at some point, the responsibility belongs to the people there. We can pave the way, but they have to walk the road.

And we have done that. We have given them an opportunity to build a democracy. We have given them an opportunity to organize themselves and defend themselves. Our interest is not in their democracy, our interest is in our national security interest in the region. We'll have a minimal presence to enforce that, to secure our interests, but we are not going to run their nation for them.

MARTIN: Right.

MALVEAUX: Roland, one of the things that the report did not do, it really did not criticize all that much Hamid Karzai, the Afghan pot president. They are trying to -- with kid gloves, they're handling him, try and kind of cajole him along to get his act together, to get his government together.

What does the administration need to do? Do they need to change their approach?

MARTIN: Look, here is guy who goes off the reservation, comes back on. You see Petraeus make comments about him, Vice President Joe Biden.

I mean, at the end of the day, this is the guy you are dealing with. And so you have no choices in terms of dealing with him.

But I do think, privately, when you have Secretary of State Hillary Clinton giving tough words to him as well, that's what you have to do. But you can't have this guy just out there freelancing. You've got to treat him with kid gloves. This is the only hope you got.

MALVEAUX: All right. Roland, Alex, thanks so much. Have a great holiday.

MARTIN: Thanks so much.

MALVEAUX: Israel's air force shoots down a mysterious object over a secretive desert nuclear facility.

And the security guard who saved those hostage school board members tells what happened when the shooting started. Plus, Wolf Blitzer on an exclusive assignment inside North Korea. He talks with veteran diplomatic troubleshooter Governor Bill Richardson about his mission.

(COMMERCIAL BREAK)

MALVEAUX: Don Lemon is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now, including new video that is just getting in.

Don, what are we looking at? What do we know?

LEMON: Yes, Suzanne, we told you just a few moments ago about Julian Assange's release on bail today. Well, he just spoke again in Suffolk, England, just a few moments ago.

Let's play part of that for you, and you will see the camera moving around to get a better view of Assange. I want to you take a look at this.

(BEGIN VIDEO CLIP)

JULIAN ASSANGE, WIKILEAKS FOUNDER: We have also heard today from one of my U.S. lawyers yet to be confirmed, but a serious matter that there may be a U.S. indictment for espionage coming from a secret U.S. grand jury investigation.

QUESTION: What more can you tell us about that side, the U.S. prosecution?

ASSANGE: We only know the statements by Holder and this rumor which is yet to be confirmed. Obviously, extremely serious, and one of the concerns that we have had since I have been in the U.K. is whether the extradition proceeding to Sweden which is occurring in a very strange and unusual way is actually an attempt to get me into a jurisdiction which will then make it easier to extradite me to the United States.

(END VIDEO CLIP)

LEMON: OK. But he has to stay at the home of a friend. There are some stipulations. He has to wear an electronic monitoring bracelet, and he has to check in.

Assange is expected to be back in court next month. Again, new sound from Julian Assange.

The Israeli Air Force shut down an unidentified flying object above a nuclear plant in the desert. The object appeared a designated no-fly zone. The Israeli Defense Force says it has not found the debris yet to determine what it is, but the military says it followed procedure went the object was spotted.

Honda is recalling 1.3 million cars. About 143,000 of them are in the United States. They are the Honda Fit cars made in 2007 and 2008. Honda says there is a potential problem with the low beam headlight headlights. However, the company says no accidents have been reported because of it -- Suzanne.

MALVEAUX: Thank you, Don.

Well, heightening tensions between the Koreas. Could military exercises in the South trigger an all-out war with the North?

And it's crime-fighting with a religious twist. What led one priest out of the pulpit and into the streets.

(COMMERCIAL BREAK)

MALVEAUX: It's a city that's steeped in deadly crime. Now Youngstown, Ohio, is fighting back with the help of an unlikely source. That is a priest.

Our CNN's Kate Bolduan reports on his journey from the pulpit to the streets.

(BEGIN VIDEOTAPE)

(SINGING)

RITA BLASKO, SISTER-IN-LAW OF TOM REPCHIC: We just miss him, and he will never be replaced. I don't think any of us will ever get over this.

CHIEF JIMMY HUGHES, YOUNGSTOWN POLICE: We started racing right off the bat because you know that something serious happened.

UNIDENTIFIED MALE: I will not allow -- we will not allow these crimes, as heinous as they are, to define the city.

KATE BOLDUAN, CNN CORRESPONDENT (voice-over) (voice-over): It was the murder of 75-year-old Tom Repchic that pushed Father Greg Maturi from the pulpit.

UNIDENTIFIED MALE: The seven gifts of the Holy Spirit --

BOLDUAN: -- and into the street. Repchic was the second parishioner in eight months killed right outside St. Dominic's Catholic Church in Youngstown, Ohio.

UNIDENTIFIED MALE: It's a serious situation. Two people have been murdered. And --

BOLDUAN (on camera): From your congregation.

UNIDENTIFIED MALE: Just from my congregation.

BOLDUAN (voice-over): Youngstown faces similar challenges as other Rust Belt cities. As the steel industry fell, the population shrank by more than half in the past few decades, leaving thousands of abandoned homes that have become havens for criminal activity.

Jimmy Hughes has been a cop for more than 30 years. Today, he's the police chief in Youngstown and says urban blight is a huge factor in the city's crime.

HUGHES: When the house burglaries happen, they break into one house, they stash stolen property in some of these vacant homes. Some of the prostitutes that we have in some of the neighborhoods, they use vacant homes for their -- you know, street hotels.

BOLDUAN: And that is where Father Maturi comes in.

UNIDENTIFIED MALE: Whatever Youngstown has been doing up until now, it's not working. We need another approach.

UNIDENTIFIED MALE: Counsel, knowledge, courage.

BOLDUAN: So, Father Maturi took a list of 20 homes to Mayor Jay Williams saying the vacant properties needed to come down immediately. The mayor agreed, adding seven more, and now they are calling it Operation Redemption.

UNIDENTIFIED MALE: Do this in memory of me.

We have no more time. It is an emergency situation.

BOLDUAN: The initiative is simple but aggressive -- battle the recent violence by tearing down the abandoned homes, planting green space in its place.

(on camera): Mayor, what does tearing down homes do?

MAYOR JAY WILLIAMS, YOUNGSTOWN, OHIO: It removes the haven for criminals. It removes targets of arsonists. It allows property owners to recognize and begin to feel that their neighborhood is being transformed.

BOLDUAN (voice-over): Most of those homes surround St. Dominic's, which many here view as the last stronghold of the community.

UNIDENTIFIED MALE: We are one with the neighborhood. And the church is here to help neighborhood. And as the neighborhood goes, so goes the church.

BOLDUAN: The project hasn't been without speed bumps, though. It costs the city about $3,000 or more to demolish each home, and federal red tape has slowed the process. All the while, some fear nothing is going to turn this situation around.

BLASKO: I commend Father, and I hope he -- what he is doing will help. But I just don't see it getting better.

BOLDUAN: And Father Maturi says that is his biggest battle yet.

UNIDENTIFIED MALE: My biggest problem is not fear of being attacked by gangs. My biggest problem is keeping people from falling into despair and becoming cynical. That is a tougher fight than a physical fight.

BOLDUAN (on camera): The prominent role that you have taken, and putting kind of a face on it, do you fear that that has somehow put a target on you?

UNIDENTIFIED MALE: That may well be the case. That's not going to slow me down. This is why I became a priest. This is what a priest does.

BOLDUAN (on camera): The city has promised that all of the more than two dozen abandoned homes here will be torn down by the end of the month. Both the mayor and Father Maturi that is the first real step in stemming the tide of recent violence plaguing this town.

Kate Bolduan, CNN, Youngstown, Ohio.

(END VIDEOTAPE)

MALVEAUX: Wolf Blitzer begins an exclusive assignment in North Korea. Few outsiders make it inside that secretive communist nation. We will get a firsthand account.

And a logjam of important legislation on Capitol Hill as lawmakers engage in theatrics. I will ask one key senator what Americans are supposed to make of all of this.

Plus, Jack Cafferty asks, "What will you remember most about Larry King?"

(BEGIN VIDEO CLIP)

LARRY KING, HOST, "LARRY KING LIVE": It's time to hang up the nightly suspenders.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MALVEAUX: CNN SITUATION ROOM anchor Wolf Blitzer just started his extraordinary journey into communist North Korea. Wolf is the only television reporter accompanying New Mexico Governor Bill Richardson to the region.

Our CNN's Alina Cho was there recently when the country rolled out its heir apparent, leader Kim Jong-il's son. It was her second visit to North Korea. And Alina joins us now.

Alina, hey. Good to see you.

ALINA CHO, CNN CORRESPONDENT: Good to see you, Suzanne, as always.

MALVEAUX: You were there just a couple of months ago, and this is a country like no other country in the world.

Why is that?

CHO: I say that all of the time. You are absolutely right.

It is like no other country on earth. And it is really difficult, I have to tell you, Suzanne, for westerners to truly comprehend what is it like to be inside North Korea.

Remember, this is a place, if you're an average citizen, where there is no Internet access, many people don't own televisions. If you do own a TV, you are only allowed to watch government-sanctioned channels.

There is propaganda music blaring across Pyongyang. In fact, you don't even need an alarm clock, because the music starts at 5:00 a.m. It comes from the train station.

And speaking of propaganda, everywhere you go in Pyongyang, everywhere you look, there are statues and monuments honoring not the current leader, but his father, Kim Il-sung, the founder of North Korea.

MALVEAUX: What will Wolf encounter when he walks around on the streets? What do you think he'll see, and how do you think he will be received as a western journalist?

CHO: Well, he will be received well, I'm sure, but he will always have someone watching him from the North Korean government.

Having said that, North Korea is a very eerie place. You know, the one thing that I noticed the second trip was they had recently installed traffic lights. But very few people own cars, so the streets are largely empty. Very few cars on the street.

In fact, the way that people get around, in large part, is by foot. Some people take the subway, and you will see hordes of people just walking to their destination.

There are some stores. There are some restaurants. But they are largely empty.

This is a place that has its own currency, but there is very little of it. They don't accept credit cards. There's no such thing as a North Korean Visa or MasterCard or American Express, for that matter. Everything is dealt with in cash.

MALVEAUX: Are there any Western influences that you saw?

CHO: Remarkably, yes. I mean, one thing that I was able to see on this last trip was a western-style amusement park. I remember very distinctly, it was raining quite heavily that day, and yet it was packed.

There was a ride called the Power Surge. We went to the food court and they were selling hot dogs and ice cream. Admission was about $1 per person.

But the most notable thing that I noticed, Suzanne, was that some average citizens owned cell phones. In a communist country, that is extraordinary. I was told, however, that they weren't allowed to make international calls.

MALVEAUX: Now, you are very restricted when you are over there. What do you think the government wants you to see when you are there? Perhaps we'll show Wolf as well. What was your sense?

CHO: Well, first of all, I think it's important to note that as a Western journalist, you are only allowed into North Korea if you are invited. I was invited by the North Korean government both times I was there, and certainly that was the case, is the case with Wolf.

Having said that, as soon as you get off of the plane in Pyongyang, and you go through Customs, your passport is confiscated, your cell phone is confiscated, your visa is confiscated. In fact, one thing that I really wanted when I left Pyongyang was a stamp in my passport that said "Pyongyang," some sort of record.

MALVEAUX: Right.

CHO: There's never any record that you are there. When you arrive, you are greeted by government minders who watch you at all time. And so, yes, every movement is restricted -- Suzanne.

MALVEAUX: All right. Alina, thank you so much for your perspective.

Obviously, we'll be checking in with Wolf to see how he is doing in North Korea.

Thanks again, Alina.

CHO: You bet.

MALVEAUX: New warnings that al Qaeda could be plotting to attack Americans over the holidays. We're going to have the latest.

Plus, President Obama's health care reform under siege now. Why a linchpin of the president's plan could now be in jeopardy.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

KING: Good evening. My name is Larry King, and this is the premier edition of "LARRY KING LIVE."

RICHARD NIXON, FMR. PRESIDENT OF THE UNITED STATES: Well, I have never been in the Watergate. So it's not a hard --

KING: Never been there? Never in the restaurant?

NIXON: No, no. Other people were in there though, unfortunately.

KING: That's still a Texas driver's license?

GEORGE H. W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: Yes. You want to see it?

(APPLAUSE)

KING: Yes.

(singing): I'm going to make him an offer he can't refuse.

MARLON BRANDO, ACTOR: Darling, good-bye.

KING: Good-bye.

(END VIDEOTAPE)

MALVEAUX: Just a few of our favorite Larry King moments.

Jack is back now with some of yours.

Hi, Jack.

CAFFERTY: The question this hour is: What will you remember most about Larry King? His last broadcast on this network is tonight, his last regular night. He's going to be doing some specials for us later.

Bob writes from Ohio, "I'll remember that once upon a time, interviews were conducted with courtesy, class and civility, while at the same time addressing important topics. That is why most of the world's prominent figures were willing to sit down with Mr. King."

Toni says, "I had to get up at 3:00 in the morning, make my husband lunch, and send him off to work. The radio show by Larry King was the most entertaining radio program I ever heard. Pretty soon, I was looking forward to getting up at 3:00 a.m. so I could listen to Larry."

"The sports commentary intrigued me even though I wasn't much of a sports fan. His knowledge amazed me. Larry King and I became inseparable. He'll always be a part of my life, and he doesn't even know it."

Well, now he does.

Karen writes in Idaho, "I remember the episodes featuring Jack Hanna. Larry was always afraid of the reptiles and the bugs, and Jack delighted in putting them on Larry's jacket and making him touch them. We got a lot of laughs from the two of them."

Nancy in Reno writes, "Before CNN, I was a single mom raising three kids by dressmaking at home. I survived working late at night, after tucking the kids in listening to Larry King on the radio. His funny stories, irreverent kiss-offs to rude callers kept me awake, kept me informed, kept me laughing, and kept me working."

"Thanks, Larry, for helping support my kids. All three are college graduates now and one of them is a doctor." Lois writes, "The different shapes and colors of his suspenders and how he always puts his hands under his chin following each question he asks. Cool."

Nancy in Texas, "Known for his open-ended interviews, diplomatic comments, he's a true gentleman and a good listener. Media doesn't need to give us all young, good-looking people. We want substance and intelligence."

Patrick in Arizona, "I typed this with a big smile on my face. 'Hello, Altoona! Altoona, you are on!' in his signature raspy voice, an absolute pleasure to watch."

And Steve in Florida writes, "Listening to Larry's Miami radio show at 2:00 in the morning kept me company on my regular trips between Miami and the Florida Keys. That and his interview with Abraham Lincoln."

If you want to read more on this, go to the blog. Got lots of e-mails about Larry. We will miss him around here. He's one of a kind -- Suzanne.